Manhattan District Attorney Robert M. Morgenthau announced today the indictment of a realtor for conducting a real estate fraud scheme in which he struck several deals to sell a commercial building that he did not own.

The defendant, HENRY VARGAS, 35, was indicted on charges of scheme to defraud, grand larceny and forgery. The crimes charged in the indictment occurred between September 2007 and January 2009.The investigation leading to the indictment revealed that more than two years ago, VARGAS began fraudulently passing himself off as the owner of 21-41 Lenox Avenue, a commercial building just north of Central Park. In fact, the building was wholly-owned by Manuel Duran, Jr. Using false representations and forged documents, VARGAS duped numerous real estate developers, business people, architects, attorneys and property owners into believing that he, not Duran, owned a controlling interest in the property.

Over the course of his scheme, VARGAS forged an operating agreement for the property, bestowing upon himself a 60% ownership interest. He thereafter entered into an option agreement with Pete Skyllas, a plumber and real estate developer in Harlem. This agreement called for Skyllas to pay $4.8 million for VARGAS’ fictitious 60% ownership interest in the LLC. Mr. Skyllas made $1 million in down payments to VARGAS.

Shortly before agreeing to sell 60% of the building to Skyllas, VARGAS had begun negotiating to sell the property to the New York Road Runners, a Manhattan not-for-profit that oversees the New York City Marathon. The Road Runners signed a contract to buy the property for $8.5 million and placed $1 million in escrow in anticipation of the deal’s closing. The organization also spent approximately $300,000 on attorney’s fees, real estate consultants, environmental studies and other services related to VARGAS’ bogus deal.

The house of cards collapsed in November 2008, when the Road Runners notified the building’s commercial tenants about the purported transfer of ownership. One tenant subsequently called the true and exclusive owner of the building, Manuel Duran, Jr., who soon discovered VARGAS’ agreements to sell the property to Skyllas and the New York Road Runners. Prior to receiving the call from his tenant, Duran had no inkling that VARGAS was scheming to sell his property.

The investigation began when several victims of the fraud contacted the District Attorney’s Office.

VARGAS was indicted on one count each of Grand Larceny in the Second Degree and Attempted Grand Larceny in the First Degree, both class C felonies carrying a mandatory minimum of 3 to 6 years in prison and a maximum of 7½ to 15 years, and one count of Scheme to Defraud in the First Degree and two counts each of Forgery in the Second Degree and Criminal Possession of Forged Property in the Second Degree, all of which are class D felonies carrying a mandatory minimum of 2 to 4 years in prison.

Assistant District Attorney Sally Pritchard of the Special Prosecutions Bureau is in charge of the prosecution under the supervision of Assistant District Attorney Thomas Wornom, chief of the Special Prosecutions Bureau. Detective Michael Turck of the District Attorney’s Office Squad assisted in the investigation, under the supervision of Captain Ronald Haas, Commanding Officer of the District Attorney’s Office Squad.